Thrift Officials Say Industry Will Put Homeowners First

SAN FRANCISCO — When financial deregulation began opening new business horizons to thrifts in 1980, there were predictions that home-mortgage lending would suffer as the industry diversified.

But that has not happened, thrift officials say, and is not likely to occur.

''Housing is our primary business,'' said William B. O'Connell, president of the U.S. League of Savings Institutions, during the trade group's recent annual convention here.

Since deregulation, which expanded savings-and-loan business opportunities in commercial real estate and consumer lending, thrifts have continued to make more than half of all home loans originated annually. That portion has been constant for the past 20 years, league spokesman James Kendall said.

''The reason we make twice as many home loans as anyone else is because of our deep commitment to mortgage financing,'' O'Connell said.

''There are four times as many commercial banks with twice the financial resources, yet banks made only 20 percent of the home loans last year. Commercial banks prefer to concentrate on the needs of business and industry.''

Next to thrifts, mortgage bankers -- the middlemen who make home loans, sell them in the secondary market and charge fees for servicing those loans -- are the second-largest originator of residential mortgages.

O'Connell said thrifts last year made loans for more than 1.8 million homes -- more than the number of all the owner-occupied houses in Baltimore, St. Louis, Hartford, Conn., and Sacramento, Calif., combined. The value of home-mortgage loans made this year is expected to reach a record $230 billion. Savings institutions have diversified in recent years and will continue to do so, O'Connell said, but ''we're committed to the business of helping Americans become homeowners.''

Gerald J. Levy, immediate past chairman of the league, said thrifts are developing many different business plans and strategies under deregulation. But the different paths being taken do not constitute a split, he said.

''The institution that concentrates almost exclusively on lending for portfolio and the institution that sells off virtually all the loans it originates both are in the core business that started this great business -- home-mortgage lending,'' Levy said.